Ultralife Corp. (ULBI) is a Newark, N.Y.-based company that provides critical power and communications systems to customers in the defense, medical, security, and energy industries, explains growth stock expert Mike Larson, editor of Under the Radar Stocks.
Its products include satellite antennas, amplifiers, chargers, and rugged lithium-ion batteries that range from as small as a credit card to as large as a car battery.
They’re used to power handheld radios, medical carts, ventilators, emergency radios and beacons, security access card systems, robots, and unmanned drones, among other equipment.
Then there’s the whole “Internet of Things” (IoT) trend. The buzzword term refers to the fact many more electronic devices are wirelessly connected to each other, and to you and I, via smartphones and computer networks. That makes it easy to remotely adjust important settings, receive and send updates, and perform other tasks.
There’s just one problem: Those connected devices require power — and they can’t all be plugged into wall sockets all day! That’s where Ultralife’s advanced batteries come into play. It’s also why ULBI is a great “backdoor” way to profit from the IoT boom.
When it comes to the latest numbers, there’s a lot to like here. First-quarter sales rose 4.7% to $23.1 million from $22 million a year ago. Operating margin expanded to 10.2% from 8.4%. And net income surged more than 29% to $2.2 million, or 14 cents per share, from $1.7 million, or 11 cents per share.
Here’s one last thing to consider: ULBI has a market capitalization of just $142 million and no traditional analyst coverage on Wall Street. But it has been steadily climbing our Weiss Ratings scale. It moved from the SELL zone in 2014 to HOLD for much of 2016 to BUY for most of this year.
If that improving trend continues, ULBI could attract fresh analyst coverage and investor attention — yet another factor that could push the shares higher. My recommendation: Buy ULBI at the market. It’s just the kind of stock that should be able to weather whatever this market throws at it.
